Stock markets crossed 31K points on Friday. There are several mutual funds that has been performing well in this bull run. Some of the readers on this blog commented saying “should we invest in hot mutual funds that are giving highest returns in the last 3 months leaving away long term performance”. The answer is not plain simple. I have filtered top 10 hot mutual funds in the last 3 months based on key parameters. Let us also check how they have been performing in last 1 year, 3, years, 5 years and 10 year. Is this performance short term in nature? Should you invest in these top 10 Hot Mutual funds ignoring the performance on how they did in long term?

Fund Objective: The MF scheme aims to generate long term capital appreciation by primarily investing in diversified mid cap stocks that have a potential to emerge as the bigger corporates with higher performance.

This is mid-cap mutual fund that gave 14% returns in last 3 months compared to its benchmark Nifty Free Float Midcap Index which gave 7.5%.

This fund gave 39% returns in 1 year, 29% annualized returns in 3 years, 30% annualized returns in 5 years and 17% annualized returns in last 10 years.

VRO rates it as 3 Star and Crisil as Rank-2.

Our View: This fund was rated as 5 Star during 2015 and now it is 3 star. This fund has not been performing well till 1 year back. Now in bull run, this fund became rock star. One should invest in consistent performing Funds instead of funds that perform well in only bull runs. Stay away from such funds as of now.

Top#2 Hot Fund: Reliance Small Cap Fund

Fund Objective: This scheme aims to generate capital appreciation by investing in smaller companies. This is just 6 years old scheme. However, in these 5 years, it has beaten its peers with high returns.

This is smallcap mutual fund that gave 13% returns in last 3 months compared to its benchmark BSE Smallcap Index which gave 11%.

This fund gave 43% returns in 1 year, 31% annualized returns in 3 years, 33% annualized returns in 5 years.

VRO rates it as 3 Star and Crisil as Rank-2.

Our View: This fund is launched over 6 years now. This fund has been consistently performing well in small cap segment and giving amazing returns. It gave stellar performance of 21% annaulised returns from its launch. It performed well when Sensex was at 26K and even at 28K. This one of my best favorite smallcap fund which I have been recommending for the past few years. One of the best top 10 hot mutual funds that can be invested for short term to long term.

This is largecap mutual fund that gave 13% returns in last 3 months compared to its benchmark NIFTY50 which gave 7%.

This fund gave 30% returns in 1 year, 11% annualized returns in 3 years, 14% annualized returns in 5 years and 10% annualized returns in last 10 years.

VRO rates it as 3 Star and Crisil has not rated this fund.

Our View: This fund is launched over 10 years now. It gave 11% annualized returns since launch. Many average mutual funds gave 12% to 15% annaulised returns in this bull run, hence this fund was underperformer earlier and even today. However it became hot fund in last 3 months. Investors should invest in consistent performing large cap funds and should avoid these funds which only perform during bull run.

Top#4 Hot Fund: L&T Midcap Fund

Fund Objective: This schme aims to generate capital appreciation by investing primarily in midcap stocks. The Scheme will invest primarily in companies whose market capitalization falls between the highest and the lowest constituent of the Nifty Free Float Midcap 100 Index.

This is midcap mutual fund that gave 13% returns in last 3 months compared to its benchmark NIFTY Freefloat Midcap 100 which gave 7.5%.

This fund gave 45% returns in 1 year, 29% annualized returns in 3 years, 29% annualized returns in 5 years and 16% annualized returns in last 10 years.

VRO rates it as 3 Star and Crisil as Rank-2.

Our View: This fund is launched over 13 years now. It gave 22% annualized returns since launch indicating superior performance. However such high returns have only come in the past few months in this bull run. If you refer my top 10 midcap funds published few weeks back, there was no place for it. Though the performance is good now, one should invest in consistent performing midcap funds that can give high returns in long run irrespective whether there is bull run or not.

Top#5 Hot Fund: Reliance Banking Fund

Fund Objective: The scheme aims to generate continuous returns by actively investing in equity, equity related or fixed income securities of banks. The proportion of investment between equity and debt will be decided based on the view of the fund manager on anticipated movement in both debt as well as equity markets.

This is my favorite banking mutual fund that gave 13% returns in last 3 months compared to its category average of 11%.

This fund gave 42% returns in 1 year, 18% annualized returns in 3 years, 22% annualized returns in 5 years and 19% annaulised returns in 10 years.

VRO rates it as 3 Star and Crisil does not rank as it is sector fund.

Our View: This fund is launched over 14 years now. This fund has been consistent performing well in banking segment and giving amazing returns of 25% annaulised returns from its launch. It performed well when Sensex was at 26K and even at 28K. I have been recommending this fund as part of Best Sector Mutual Funds to be invested in the last few years. This is one of the good mutual funds that can be invested for short term to long term.

Top#6 Hot Fund: IDFC Tax Advantage (ELSS) Fund

Fund Objective: The scheme seeks to build a diversified portfolio comprising of stocks of companies with strong fundamentals that are available at reasonable valuations. The scheme can be fully into equities (and equity related securities) and upto 20% in debt & money market instruments.

This is ELSS Taxsaving mutual fund that gave 12% returns in last 3 months compared to its benchmark S&P BSE 200 which gave 7.2%.

This fund gave 30% returns in 1 year, 20% annualized returns in 3 years, 23% annualized returns in 5 years.

VRO rates it as 4 Star and Crisil as Rank-3.

Our View: This fund is launched over 9 years now. It gave 21% annualized returns since launch indicating stellar performance. However such high returns have only come in the past few months in this bull run. If you refer my Top ELSS Tax Saving Mutual Funds published 6 months back, there was no place for it. Though the performance is good now, one should invest in consistent performing Tax Saving funds that can give high returns in long run. We don’t get bull run every year J.

Top#7 Hot Fund: ICICI Prudential Banking and Financial Services Fund

Fund Objective: The scheme seeks to maximize long term capital gains by investing in equity and equity related securities of banking, financial and non-banking financial companies that form a part of Banking and Financial Services Industry. A large share of the assets of the scheme will be invested in the stocks comprising the benchmark, BSE Bankex Index.

This is my favorite banking and fin services mutual fund that gave 12.5% returns in last 3 months compared to its category average of 11%.

This fund gave 52% returns in 1 year, 23% annualized returns in 3 years, 28% annualized returns in 5 years.

VRO rates it as 4 Star and Crisil does not rank as it is sector fund.

Our View: This fund is launched over 9 years now. This fund has been consistent performing well in banking and fin services segment and giving amazing returns of 22% annaulised returns from its launch. It performed well even when Sensex was at at 28K. I have been recommending this fund as part of Best Sector Mutual Funds for 2017 to be invested in the last few years. This is one of the good mutual funds that can be invested for short term to long term.

Top#8 Hot Fund: DSP BR T.I.G.E.R. Fund

Fund Objective: The scheme aims generate capital appreciation by investing in equity and equity related securities of corporates that could benefit from ongoing structural changes and economic reforms in the country. The portfolio is well diversified across sectors, market capitalisation and between private & PSU companies and will get benefit from increased government spending on infrastructure and increased private participation and revival in the corporate capex cycle.

This is Infrastructure mutual fund that gave 12% returns in last 3 months compared to its benchmark S&P BSE 100 which gave 7%.

This fund gave 37% returns in 1 year, 15% annualized returns in 3 years, 20% annualized returns in 5 years and 9.5% annualized returns in last 10 years.

VRO rates it as 3 Star and Crisil does not rank as it is sector fund.

Our View: This fund is launched over 13 years now. It gave 18% annualized returns since launch indicating stellar performance. The Infra growth has come only in the last 3-4 years after new government focus in on Infrastructure development. We have highlighted this fund in our list of Best Infrastructure Mutual Funds 3 years back and even in Feb-2017. One can invest in Infra Funds for next few years and they can provide amazing returns in short term to medium term. Like I indicated in other article, one should be cautious of investing in such funds for long term. Change in Govt focus towards Infrastructure could change the performance of Infra sector.

Top#9 Hot Fund: Birla SL Infrastructure Fund

Fund Objective: The scheme aims to provide capital appreciation by investing predominantly in a diversified portfolio of equity and equity related securities of companies that are participating in the growth and development of infrastructure in India. It also invest a small portion of its corpus in money market instruments & in ADG/GDR.

This is Infrastructure mutual fund that gave 12% returns in last 3 months compared to its benchmark NIFTY50 which gave 7%.

This fund gave 35% returns in 1 year, 16% annualized returns in 3 years, 20% annualized returns in 5 years.

VRO rates it as 3 Star and Crisil does not rank as it is sector fund.

Our View: This fund is launched over 10 years now. It gave 11% annualized returns since launch indicating average performance from launch. The Infra growth has come only in the last 3-4 years after new government focus in on Infrastructure development. Hence its performance between 3-5 years is good. We have highlighted this fund in our list of Best Infrastructure Mutual Funds in Feb-2017. One can invest in Infra Funds for next few years and these can provide amazing returns in short term to medium term. Like I indicated earlier, one should be cautious of investing in such sector funds for long term.

Top#10 Hot Fund: L&T Infrastructure Fund

Fund Objective: The scheme objective is to generate capital appreciation by investing primarily in companies that are engaged in the area of infrastructure. The fund would select fundamentally sound companies, having potential to deliver superior earning growth in long run.

This is Infrastructure mutual fund that gave 12% returns in last 3 months compared to its benchmark which gave 7%.

This fund gave 46% returns in 1 year, 19% annualized returns in 3 years, 22% annualized returns in 5 years.

VRO rates it as 4 Star and Crisil does not rank as it is sector fund.

Our View: This fund is launched over 9 years now. It gave 4% annualized returns since launch indicating pathetic performance. The Infra growth has come only in the last 3-4 years after new government focus in on Infrastructure development. Hence its performance between 3-5 years is good. We have highlighted this fund in our list of Infrastructure Mutual Funds in Feb-2017. One can invest in Infra Funds for next few years and these can provide amazing returns in short term to medium term. Again, don’t invest for long term as these are sector mutual funds.

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Suresh KP i.e. me, have written 1250+ articles on this Blog. I love doing analysis on various Best Investment Plans like mutual funds, Stocks, IPO’s, NCD Bonds, Insurance products. If you like our blog, you can share some of the good articles on your Facebook or Twitter. This would be the BIGGEST gift which you would be giving to us.